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The duty of care to distressed employees

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11 JUL 2016By:

The Supreme Court of Queensland has allowed a negligence claim by a former nursing home administrator whose pre-existing anxiety disorder was exacerbated by work stressors1.

The employee, Ms Eaton, had been employed as an administrator at the nursing home for almost two years before a new manager, Ms Harrison, arrived. Over the course of 10 to 11 months it was found that Ms Harrison conducted herself in an unreasonable manner towards Ms Eaton (although this was disputed by the nursing home and Ms Harrison). This exacerbated Ms Eaton's pre-existing anxiety disorder, which had not previously affected her work, resulting in major depression and posttraumatic stress disorder.

As the medical evidence was that Ms Eaton, who was 55 years of age when she resigned, and 60 at the time of the judgment, was unlikely to work again, Ms Eaton was awarded approximately $435,000 in damages including past economic loss and future lost earnings over a period of 6 years up to age 67, less discounts. The employer was also ordered to pay Ms Eaton's legal costs.

The reason why Ms Eaton succeeded in her claim, where some other employees fail, is that she overcame the hurdle of proving that her psychiatric illness was reasonably foreseeable to her employer. The High Court2 has laid down the ground rules in this area, stating that it is too large a step to say that all employees are at risk of psychiatric injury from stress at work, and there must be something more, such as the nature and extent of the work or signs from the employee (eg frequent or prolonged absences that are uncharacteristic) to make the risk foreseeable.

Claimants can overcome this hurdle if they have told their employer that their health is suffering due to work issues, such as long hours, or conflict at work. Claimants can also overcome this hurdle in situations where an employer has actually foreseen the risk. For example, in Swan v Monash Law Book Cooperative3, the Board minutes recorded a bullying complaint by an employee and noted that the Board may be vicariously liable for the manager's behaviour, and that this would include WorkCover claims.

In Ms Eaton's case, it was the visible deterioration in her psychological state under her new manager that made the risk of psychological injury foreseeable. According to her lawyers this included general negative change in her character and demeanour, appearing withdrawn, worried, preoccupied and crying at the workplace. While the court did not make findings as to whether all of these factors made the risk foreseeable, the trial judge found that on the evidence of Ms Harrison herself, Ms Eaton was seen several times to be shaking with a tremor in her hands and was often "teary". Several witnesses had also seen Ms Eaton in that condition and some fellow workers said that she used to be "bright and bubbly" before the new manager arrived.

The trial judge did not think these signs were enough, and ruled against Ms Eaton's negligence claim, but the Supreme Court disagreed and Ms Eaton's appeal was successful.

According to the Supreme Court, Ms Eaton's manager ought to have foreseen, from Ms Eaton's behaviour, that there was a particular vulnerability for Ms Eaton such that there was a risk that she would develop a psychiatric illness, and that the employer should have exercised reasonable care to avoid or minimise her stressful experiences in the workplace.

This decision will have ramifications for HR practitioners who will be in a better position to intervene in cases where an employee has not asserted that their health is at risk but has exhibited a visible deterioration in their psychiatric state including being shaky or teary at work. In those cases the employer has a duty to protect the health and safety of the employee and is justified in intervening to bring about changes in the workplace to avoid or minimise stress to the employee.

If you have any questions about this decision please contact Donna Trembath on (02) 9286 8114 or [email protected].

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DLA Piper is a global law firm with lawyers located in more than 40 countries throughout the Americas, Europe, the Middle East, Africa and Asia Pacific, positioning us to help clients with their legal needs around the world.